Chapter 7 Bankruptcy Trustee Grabbing Alimony Payments

Esther is divorced, mother of two grade school children. She and the kids are living on child support, alimony, and pulling money out of her retirement. She has $10,000 left in her retirement. Her most valuable possession is her paid for 2007 Honda Odyssey. It has 148,000 miles.

Esther hasn’t worked in several years. She had been a stay-at-home mom for most of the marriage. (Her retirement is from Sentara, so I’m guessing at one point she worked as a nurse.)

Esther filed Chapter 7 bankruptcy this spring in Norfolk, VA. Her papers showed she had several unpaid medical bills. Her largest credit card, less than $4000, was with Capital One.

The Chapter 7 trustee told the bankruptcy judge that he wanted her alimony. Without the alimony, it’s hard to know how this family will make it. The child support, without the alimony, is less than the rent. The children will suffer.

The bankruptcy lawyers in Virginia, led by Darden Hutson and Daniel Press, are looking for members of the Virginia General Assembly to help moms like Esther. We need a sponsor for a bill to clarify that spousal support cannot be taken away by the bankruptcy court.

Once we get a sponsor, the key man is Del. David Ablo (R-Springfield).

Delegate Dave Albo, with his wife, Rita, and adopted son, Ben. Del Albo is Chairman of the Courts of Justice Committee in the Virginia House of Delegates. He will have more say than any other one person, on whether the legislature will help women and children, by telling the bankruptcy court to keep their hands off alimony and spousal support.

Del. Albo is Chairman of the Courts of Justice Committee, in the Virginia House of Delegates.

His committee controls whether bills on bankruptcy exemptions go to a vote in the full House of Delegates.

Early in his career, Del. Ablo demonstrated his heart for children. He served as a court-appointed guardian for neglected and abused children.

We hope that Dave Albo will show his heart for children this year by supporting our bill.

Update: thank you Del Dave Albo!

Under Del Albo’s leadership, his committee approved this important law in an unanimous vote, January 28, 2015!

Update 2: Passed and signed into law March 2015.

Gov. Terry McAuliffe signed into law this morning HB 2015, that fixed this problem, and protected single moms and their families.

Only one member of the 140 member Virginia General Assembly voted no. Still, it could have gotten hung up at any point. Three legislators deserve special thanks for their work.

Ocwen Back-Dates Loan Mod letters–according to NY Attorney General.

Here’s a PR photo of Ocwen President Ron Faris offering a loan mod to struggling home owners. The New York Attorney General charges that Ocwen back dates some mod paperwork, so consumers miss their deadlines.

One of the scary thing about applying for loan mods is the short deadlines you have to get them stuff–often things you’ve sent them twice before.

As a bankrutpcy lawyer, I’m often sent copies of those requests to send on to my clients–and sometimes the dates seemed a little odd.

I was still shocked when the Attorney General of New York says Ocwen is back-dating some of those letter: maybe intentionally.

In spite of all the dishonesty that went into the housing crisis, I still tend to thing banks are usually run by honest people. I’m going to start looking at the dates on those letters I get more closely–and I hope they get what they deserve.